LOPEZ Inc.’s majority bloc on Wednesday renewed its objections to First Gen Corp.’s reduction of its stake in Prime Hydropower Energy Inc. (PHEI) to 33 percent from 40 percent, claiming the adjustment was not presented to or approved by the board.
The group said the revised structure was introduced just three weeks after the original transaction was approved on Feb. 13.
The 40-percent deal was said to be valued at P75 billion, including a P50-billion premium intended to reimburse PHEI parent Prime Infrastructure Capital Inc. (Prime Infra).
Under the revised 33-percent structure, the deal will be reduced to P62 billion, effectively lowering First Gen’s stake while altering the economics of the transaction.
“At 33 percent, the deal would cost P62 billion, with a P42 billion premium, leaving Prime with 67 percent equity and First Gen carrying all the risks, even as a minority with no rights,” the group said.
“Which deal prevails now?” it asked, questioning the shift in terms following the earlier board approval.
The majority bloc also raised concerns over consistency in governance and board approval processes.
The group questioned First Gen’s earlier public disclosures, including statements that the transaction had been “unanimously approved” by independent directors.
“How could the board’s independent members... claim everything was ‘unanimously approved’ in a public statement?” it said, referring to directors Manuel Ayala, Alicia Rita Morales and Edgar Chua.
It further criticized the approval process, saying the deal “was hidden under ‘other items’ on the agenda and [had been] discussed only for an hour.”
First Gen representatives were not immediately available for comment. The firm has previously said the adjustment was driven by the need to fund “high-potential assets in the pipeline,” citing financial considerations in recalibrating its investment strategy.
The Lopez group rejected this explanation, arguing it raises concerns on timing, disclosure and whether directors were fully informed of the company’s financial position at the time of approval.
It also urged regulators to review the transaction, citing governance concerns and the interests of institutional investors involved in the deal, including state pension funds such as the Social Security System and the Government Service Insurance System.
“Regulators must step in,” the group said, calling for scrutiny of the disclosures, timing and related governance issues.
First Gen has said there was nothing preventing continued discussions with Prime Infra regarding potential adjustments to the investment structure.
The Lopez group, however, questioned this assurance, asking for written commitments on any potential reversal of the reduced stake and valuation terms.
First Gen shares on Wednesday dropped P0.16, or 1.02 percent, to close at P15.54 each.
